Any reading above 50.0 signals expansion, and this is the first
time the number has been above 50.0 since January 2012.

"The final Output Index reading of 50.5 confirms a welcome return
to growth for the Eurozone economy at the start of the third
quarter, raising hopes that the region can finally claw its way
out of its longest-running recession,"
said Markit's Rob Dobson. "Granted, the euro area has
experienced false dawns before, but the improvements in
confidence and other forward-looking indicators warrant at least
some optimism for the outlook this time around. Germany posted a
return to expansion in July, while the downturns in the other
big-four economies all eased.

“Manufacturing is leading the way out of contraction, with some
nations benefitting from improved export demand. The real sparks
which will hopefully ignite the recovery are the increasing signs
of stabilisation in domestic markets. This not only aided
manufacturers, but also pulled the service sector right back to
the cusp of recovery.

“The labour market remains the main bugbear of the eurozone, as
rising joblessness hurts growth and raises political and social
tensions. But even here there was some better news, with the rate
of job cutting easing to a 16-month low. With price pressures
also relatively contained, the ECB will maintain its confidence
that there are brighter skies on the horizon.”